The global environment for foreign direct investment (FDI) improved in 2005. Macroeconomic growth, traditionally one of the main drivers of direct investment, gained momentum in several OECD countries. In addition, corporate profitability was generally strong, interest rates were low and equity valuation in most countries was firm so ample liquidity was available to companies wanting to invest abroad. In this benign environment, overall FDI inflows to OECD countries grew by 27 per cent to reach US$ 623 billion in 2005. At the same time, OECD economies remained strong net contributors of direct investment capital to the rest of the world. Estimated new outflows in 2005 were US$ 95 billion.
The special focus of this International Investment Perspectives volume is on legal and policy issues arising from international investment agreements. The articles in this section, which were prepared for the OECD Investment Committee, investigate novel features of recent bilateral investment treaties; options for improving the system of investor-state dispute settlement; and the consolidation of claims as an avenue for improving investment arbitration.
This volume contains several more articles on topical investment issues. One takes stock of how new technologies are a force advancing the closer integration of national economies. Another reviews the challenges and opportunities for policy makers that arise from international investor participation in infrastructure. A third summarises recent evidence of source (or "home") country benefits of outward direct investment. The final article explains the role of the OECD peer review process in building investment policy capacity.
This issue of International Investment Perspectives includes the following articles:
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